- Associated Press - Thursday, July 24, 2014

SANTA FE, N.M. (AP) - A federal Medicaid agency isn’t planning to review a decision by Gov. Susana Martinez’s administration last year to freeze payments to mental health providers because of alleged fraud, mismanagement and overbillings, State Auditor Hector Balderas said Thursday.

In a letter to a legislative panel, Balderas said the Centers for Medicare and Medicaid Services informed him in March it decided not to review state findings of “credible allegations of fraud” against more than a dozen providers.

The administration halted payments to 15 nonprofit mental health providers based on those allegations. The state contracted with Arizona companies to take over the behavioral health services that had been offered by most of the New Mexico-based providers to about 30,000 Medicaid-eligible adults and children.

Balderas said the federal agency told him it “gives great weight” that the attorney general’s Medicaid fraud unit accepted the mental health provider cases and continues to investigate them.

The federal agency responded to Balderas after he had forwarded an audit by his office earlier this year that concluded the Human Services Department had improperly handled fraud allegations against the providers.

Human Services spokesman Matt Kennicott said the federal agency’s decision wasn’t surprising because federal regulations make the state department solely responsible for determining whether fraud allegations merit investigation.

Balderas also said he had referred his audit to the inspector general’s office of the federal Health and Human Services Department. His staff has provided the inspector general with documentation and a briefing.

“I am hopeful that OIG may determine further review of behavioral health services in New Mexico is needed,” Balderas said.

Kennicott said the department hasn’t been contacted by the federal inspector general.

Attorney General Gary King’s office has finished its investigations of two providers, finding no fraud but identifying overbillings.

The attorney general is responsible for investigating possible Medicaid fraud but it’s up to the Martinez administration to recover money from improper billings.

Balderas provided the Behavioral Health Subcommittee his letter in appearing before the panel in Espanola to update lawmakers on his audit of the Human Services Department.

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